Employers should be alert to current worker entitlements:
- Unfair Dismissal High Income Threshold;
- Compensation Cap for Unfair Dismissal;
- Redundancy Tax Free Amount;
- Employment Termination Payments (ETP) Lower Tax Rate Cap;
- Superannuation Maximum Contribution Base; and
- Civil Penalties for Breaches of the Fair Work Act.
Unfair Dismissal High Income Threshold
From 1 July 2018, the High Income Threshold increased from $142,000 to $145,400.
Employees earning more than $145,400 cannot make unfair dismissal claims unless they are covered by a modern award or an enterprise agreement.
The following are included in the High Income Threshold calculation:
- Money paid on behalf of the employee (e.g. salary sacrifice); and
- The agreed monetary value of non-monetary benefits (e.g. company car or mobile phone).
The High Income Threshold calculation does not include:
- Payments which cannot be determined in advance (e.g. commissions, incentive-based payments and bonuses);
- Overtime (unless the overtime is guaranteed); and
Unfair Dismissal Compensation Cap
The maximum compensation for unfair dismissal applications is the lesser of 6 months pay or the equivalent of half the Unfair Dismissal High Income Threshold, $72,700.
Redundancy – Tax Free Amount
The Tax Free Amount for genuine redundancy payments is indexed annually. From 1 July 2018 the TFA increased from $10,155 to $10,399.
The additional amount per completed year of service increased from $5,078 to $5,200.
Employment Termination Payments (ETP)
The cap for the lower tax rate on ETPs is $215,000.00 for the 2018-19 income year.
From 2014-15 the Superannuation Guarantee Contributions Rate was frozen at 9.5% and will likely remain at this rate until the 2020-21 financial year.
From 1 July 2018 the maximum quarterly contribution base increased from $52,760 to $54,030; and the maximum annual contribution base increased from $211,040 to $216,120.
The maximum contribution bases are the maximum salary amounts for which an employer must contribute superannuation guarantee amounts, unless the employer has agreed to pay superannuation contributions on the total salary paid.
Civil Penalties for Breaches of the Fair Work Act
From 1 July 2017 to 30 June 2020, the civil penalty unit for single breaches of the Fair Work Act is $210.00.
The maximum penalty is, for:
- a company: $63,000.00 for a non-serious contravention, $630,000 for a serious contravention.
- an individual: $12,600.00 for a non-serious contravention, $126,000 for a serious contravention.
Multiple breaches can result in multiple penalties being imposed.
Contact Peter McNamara today for your workplace law advice.